Meta's $14.3B Scale AI Deal: New Details Emerge

Meta’s Uncommon Investment in Scale AI

The recent agreement between Meta and the artificial intelligence startup Scale, resulting in Meta obtaining 49% ownership, represents a notably atypical transaction.

According to the official announcement, the deal establishes Scale’s valuation at exceeding $29 billion.

This arrangement will provide “substantial liquidity” to Scale’s shareholders and vested equity holders – namely, its employees – through the distribution of proceeds, while simultaneously allowing them to maintain their shareholder status.

Key Personnel Changes

Furthermore, Meta is extending an offer of employment to Alexandr Wang, Scale’s highly regarded founder and CEO.

Wang previously left MIT at the age of 19 to dedicate himself to building Scale, a company specializing in AI training data that is verified through human review.

Dividend Distribution, Not Share Purchase

While the arrangement might appear as a direct purchase of shares from current shareholders, sources speaking with Bloomberg indicate this is not the case.

Instead, investors are receiving dividends, a detail confirmed by TechCrunch.

For example, Accel, an early investor in Scale, is projected to receive a payout of approximately $2.5 billion, as reported by Bloomberg. (Accel has not issued a comment on this matter.)

Scale’s Investor Base and Valuation

Scale boasts a diverse group of investors, including both Amazon and Meta.

The company’s previous valuation stood at $14 billion following a $1 billion Series F funding round completed last year.

Given the substantial size of this dividend payout, the transaction closely resembles a company acquisition.

The ultimate determination of whether regulatory bodies concur with this assessment remains to be seen.